Stock futures fall after spending data

U.S. consumers cut spending in April for first time in a year

NEW YORK (MarketWatch) — U.S. stock futures moved lower on Friday after government data on spending showed consumers cut back on purchases and spent less on services in April.

Investors await a consumer-sentiment survey that could show a small rise in optimism in the U.S and will also hear from a clutch of Federal Reserve speakers.

U.S. economy shrinks in first quarter, and more

(1:23)

The U.S. economy contracts in the first quarter of 2014 with GDP shrinking at an adjusted annual rate of 1%.

Futures for the Dow Jones Industrial Average
US:DJM4
fell 21 points to 16,660, while those for the S&P 500 index
US:SPM4
eased 2.50 points to 1,915.40. Futures for the Nasdaq-100 index
US:NDM4
fell 3.75 points to 3,731.75.

Consumer spending slipped a seasonally adjusted 0.1% last month, the biggest drop in a year, the Commerce Department reported Friday. Economists polled by MarketWatch had forecast no change in spending.

However, a slowdown may not faze markets much, as many economists believe hiring trends will pick up in the coming months, generating more spending. Wall Street didn’t fall out of bed on Thursday after bad weather beat growth back by 1% in the first quarter, as many expect the second quarter will bring improvement. Why economists aren’t freaking out about the negative GDP numbers

Other data due Friday include a consumer-sentiment survey produced by the University of Michigan that is expected to show a small rise in optimism among Americans. The survey is seen edging up to 82.5% in May, from 81.8% in April. The report will be released at around 10 a.m. Eastern.

On the Fed circuit, the new president of the Cleveland Fed, Loretta Mester, speaks at 12:30 p.m. Eastern Time, with many watching for signs of whether she’s a hawk or dove.

Getty Images

People buy the new Apple iPad Air at the Apple Store on November 1, 2013 in New York City.

Three senior Fed officials will take part in an economic and banking conference in California, with Richmond Fed President Jeffrey Lacker due to speak at a panel on “lenders of last resort” at the Hoover Institution at 2 p.m. Eastern Time. San Francisco Fed President John Williams and Philadelphia Fed President Charles Plosser will be part of a separate panel about whether the central bank should adopt a rules-based policy to monetary policy.

Investors will be watching to see if the market can end the week on a high note. The S&P 500
SPX, -0.23%
rallied to its 13th record of the year on Thursday, closing up 10.25 points, or 0.5%, to 1,920.03. The Dow industrials
DJIA, -0.32%
rose 65.56 points to 1,920.03.

A sour tone was set for retailers late Thursday after Express Inc.
EXPR, +0.32%
posted a fall in first-quarter profit. Shares tumbled 12% premarket.

An even bigger loser was Infoblox Inc.
BLOX, +0.60%
Shares cratered 32% ahead of the opening bell after the network-control company said Chief Executive Officer Robert Thomas was stepping down and revenue fell short of expectations.

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